Tag Archives: wealth tax

Friday Afternoon Ramblings – 8/23/2019

In my previous post, I mentioned Nick Hanauer and his belief in a wealth tax. I also pointed out what I see as the shortfalls of redistributing wealth via the government. However, it’s not productive to do that without offering an alternative solution, so as promised, here is my idea for how the super wealthy could impact the lives of average Americans.

On a completely voluntary basis, people with a net worth over one billion dollars could establish foundations that help individuals launch small businesses. Right now, there are millions of working people around the country who have the knowledge and skills to run a small business in their area of expertise, but they lack the capital to purchase the equipment, form the proper entity, and take the plunge into self-employment. They also might lack the knowledge to navigate all of the legal and bureaucratic obstacles.

However, if wealthy individuals like Nick Hanauer provided grants and also business coaches to assist with getting small businesses off the ground, more individuals could have opportunities to be self-sufficient. Because the money is not being filtered through the bloated bureaucracy of government, more of that wealth goes directly to the people Hanauer wants to help.

The major advantage of following this path is that people will have the opportunities to build businesses and wealth for themselves. Instead of government handouts, people will be offered a hand up to self-reliance. Instead of being tethered to larger businesses that may or may not pay decent wages, people from every social stratum could have more equal opportunities based on the effort they are willing to put into growing their businesses.

Obviously, this is merely a thumbnail sketch of the idea, but I believe that it is an idea worth pursuing by those who have the means to make it a reality.

That’s all for now.

Wednesday Afternoon Ramblings – 8/14/2019

Recently, I heard a podcast on Planet Money in which Nick Hanauer described his trepidation about the widening wealth gap in America. In case you aren’t familiar with him, he was an original investor in Amazon. Needless to say, he is on the wealthy end of that equation, and his opinions have ruffled a few feathers. His TED Talk on the subject has been removed, and many wealthy, powerful people disagree with his premise that the wealth gap is an issue.

He proposes that we should implement a wealth tax on the super wealthy in an effort to reinvest that money into communities. While I do agree with him that we need to close the gap, I vehemently disagree that a tax is the correct way to solve the problem.

First of all, the government is too inefficient and too bloated to make a substantial transformation. Maybe, maybe 50 cents on the dollar would get back to the communities that need it. The rest would be sucked into the bureaucratic black hole.

Second, nobody likes to be taxed. Nobody. We pay them because we must, but nobody likes it. Taxation simply feels like extortion. So gathering support for Hanauer’s will be difficult.

I have an idea for a system that would be better, and over the next few days, I think I will share it on here. In the meantime, you should check out Planet Money. It’s a pretty good podcast with a lot of informative stories about economics.

That’s all for now.